With traders expressing continued uncertainty about the situation in Europe, stocks are likely to move to the downside in early trading on Tuesday. The major index futures are currently pointing to a notably lower open, with the Dow futures down by 50 points.
Negative sentiment has been generated by news that Greece's mainstream conservatives failed to form a coalition government following Sunday's election, giving the Left Coalition party an opportunity to form a government.
While the Left Coalition party is expected to face an uphill battle, its efforts could lead to a government opposed to the terms of the bailout by the European Union and the International Monetary Fund.
A note from Capital Economics said, "The failure of the Greek election to produce a new government provides some support to our view that Greece could leave the euro-zone as soon as the end of this year."
Traders also continue to express some concerns about the impact of Francois Hollande's election as the next president of France.
Hollande is expected to butt heads with German Chancellor Angela Merkel, as he has expressed significant opposition to using austerity measures to address the European debt crisis.
The continued focus on the latest political developments in Europe comes amid another light day on the U.S. economic front.
Among individual stocks, shares of Electronic Arts (EA) may come under pressure in early trading after the video game maker reported better than expected fourth quarter results but provided disappointing first quarter guidance.
Biotechnology company Dendreon (DNDN) may also see early weakness despite reporting a narrower than expected first quarter loss. Shares of Dendreon are down by 14 percent in pre-market trading.
Stocks showed a lack of direction during trading on Monday as traders expressed uncertainty about the situation in Europe following the recent election results. The markets recovered from weakness seen in early trading but ended the day nearly flat.
The major averages eventually finished the session mixed, with the Dow posting a modest loss. While the Dow fell 29.74 points or 0.2 percent to 13,008.53, the Nasdaq edged up 1.42 points or 0.1 percent to 2,957.76 and the S&P 500 crept up by 0.48 points or less than a tenth of a percent to 1,369.58.
In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance on Tuesday. Japan's Nikkei 225 Index rose by 0.7 percent, while Hong Kong's Hang Seng Index ended the day down by 0.3 percent.
Meanwhile, the major European markets have all moved to the downside on the day. While the U.K.'s FTSE 100 Index is down by 0.4 percent, the German DAX Index is down by 0.7 percent and the French CAC 40 Index is down by 1.7 percent.
In commodities trading, crude oil futures are sliding $1.08 to $96.86 a barrel after falling $0.55 to $97.94 a barrel on Monday. Gold futures are tumbling $22.70 to $1,616.40 an ounce. In the previous session, the precious metal fell $6.10 to $1,639.10 an ounce.
Among currencies, the U.S. dollar is trading at 79.89 yen compared to the 79.91 yen it fetched at the close of New York trading on Monday. Against the euro, the dollar is valued at $1.3001 compared to yesterday's $1.3051.
by RTT Staff Writer
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